“But the Prime Minister's proposals for a new system have taken a wrong turn by dismissing the importance of low skilled workers to the UK economy, the government risks harming businesses and living standards now and in the future.”

Theresa May promised low-skilled migration would fall when the UK leaves the EU as a result.

The new system, based on recommendations from the Migration Advisory Committee (Mac) would aim to bring net migration down to below 100,000 – a target the government set years ago but is yet to meet.

The Institute of Directors said the government's net migration target was “counterproductive” and called for a more balanced policy.

Director general of the IoD, Stephen Martin, said: “The division between high and low-skilled misses an important point.

“Sectors like agriculture, retail, hospitality and construction rely heavily on so-called 'low-skilled' workers, in part because domestic workers want to work in other sectors, and in part because unemployment is at a record low.”